EXHIBIT 10.24
RECEIVABLES TRANSFER AGREEMENT
DATED AS OF FEBRUARY 12, 2003
AMONG
INTERFACE FABRICS GROUP MARKETING, INC., AS AN ORIGINAL SELLER,
INTERFACE TEKNIT, INC., AS AN ORIGINAL SELLER,
INTERFACE TEKSOLUTIONS, LLC, AS AN ORIGINAL SELLER,
PANDEL, INC., AS AN ORIGINAL SELLER,
INTERFACE AMERICAS, INC., AS AN ORIGINAL SELLER
AND
INTERFACE, INC.,
AS BUYER
TABLE OF CONTENTS
PAGE
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ARTICLE I. AMOUNTS AND TERMS OF THE PURCHASE...................................................................... 2
Section 1.1 Purchase of Receivables......................................................................... 2
Section 1.2 Payment for the Purchase........................................................................ 3
Section 1.3 Purchase Price Credit Adjustments............................................................... 3
Section 1.4 Payments and Computations, Etc.................................................................. 4
Section 1.5 Transfer of Records............................................................................. 4
Section 1.6 Characterization................................................................................ 5
ARTICLE II. REPRESENTATIONS AND WARRANTIES........................................................................ 5
Section 2.1 Representations and Warranties of Original Sellers.............................................. 5
ARTICLE III. CONDITIONS OF PURCHASE............................................................................... 9
Section 3.1 Conditions Precedent to Purchase................................................................ 9
Section 3.2 Conditions Precedent to Subsequent Payments..................................................... 9
ARTICLE IV. COVENANTS............................................................................................ 10
Section 4.1 Affirmative Covenants of Original Sellers...................................................... 10
Section 4.2 Negative Covenants of Original Sellers......................................................... 13
ARTICLE V. TERMINATION EVENTS.................................................................................... 15
Section 5.1 Termination Events............................................................................. 15
Section 5.2 Remedies....................................................................................... 16
ARTICLE VI. INDEMNIFICATION...................................................................................... 16
Section 6.1 Indemnities by Original Sellers................................................................ 16
Section 6.2 Other Costs and Expenses....................................................................... 19
ARTICLE VII. MISCELLANEOUS....................................................................................... 19
Section 7.1 Waivers and Amendments......................................................................... 19
Section 7.2 Notices........................................................................................ 19
Section 7.3 Protection of Ownership Interests of Interface................................................. 20
Section 7.4 Confidentiality................................................................................ 20
Section 7.5 Bankruptcy Petition............................................................................ 21
Section 7.6 Limitation of Liability........................................................................ 22
Section 7.7 CHOICE OF LAW.................................................................................. 22
Section 7.8 CONSENT TO JURISDICTION........................................................................ 22
Section 7.9 WAIVER OF JURY TRIAL........................................................................... 22
Section 7.10 Integration; Binding Effect; Survival of Terms............................................... 23
Section 7.11 Counterparts; Severability; Section References............................................... 23
Exhibits and Schedules
Exhibit I - Definitions
Exhibit II - Principal Place of Business; Location(s) of Records; Federal
Employer Identification Number
Exhibit III - LockBoxes; LockBox Accounts; Collection Banks
Exhibit IV - [Intentionally omitted.]
Exhibit V - Credit and Collection Policies
Schedule A - List of Documents to Be Delivered to Interface Prior to the
Purchase
RECEIVABLES TRANSFER AGREEMENT
THIS RECEIVABLES TRANSFER AGREEMENT, dated as of February 12, 2003, is
by and among Interface Fabrics Group Marketing, Inc., a Nevada corporation
("INTERFACE MARKETING"), Interface Teknit, Inc., a Michigan corporation
("INTERFACE TEKNIT"), Interface TekSolutions, LLC, a Michigan limited liability
company ("INTERFACE TEKSOLUTIONS"), Pandel, Inc., a Georgia corporation
("PANDEL"), Interface Americas, Inc., a Georgia corporation ("INTERFACE
AMERICAS," each of Interface Marketing, Interface Teknit, Interface
TekSolutions, Pandel and Interface Americas, an "ORIGINAL SELLER" and,
collectively, the "ORIGINAL SELLERS"), and Interface, Inc., a Georgia
corporation ("INTERFACE"). Unless defined elsewhere herein, capitalized terms
used in this Agreement shall have the meanings assigned to such terms in Exhibit
I hereto (or, if not defined in Exhibit I hereto, the meaning assigned to such
term in the Loan Agreement).
PRELIMINARY STATEMENTS
Each of the Original Sellers now owns, and from time to time hereafter
will own, Receivables.
Each of the Original Sellers wishes sell to Interface, and Interface
wishes to purchase from such Original Seller, its respective Receivables,
together with the Related Security and Collections with respect thereto, in
accordance with the terms and conditions hereof.
Each the Original Sellers and Interface intend the transactions
contemplated hereby to be true sales of the Receivables from each such Original
Seller to Interface, providing Interface with the full benefits of ownership of
the Receivables, and neither any of the Original Sellers nor Interfaces intend
these transactions to be, or for any purpose to be characterized as, loans from
Interface to any Original Seller.
Following the purchase of Receivables from the Original Sellers, (a)
Interface will sell or contribute to Interface Securitization Corporation
("SPV") and SPV will purchase from Interface, all of Interface's right, title
and interest in and to the Receivables, Related Security and Collections
purchased by Interface pursuant to the terms of a certain Receivables Sales
Agreement, dated as of the date hereof, between Interface and SPV (as amended,
restated or otherwise modified from time to time, the "RECEIVABLES SALE
AGREEMENT") in accordance with the terms thereof and (b) SPV will grant a
security interest in the Receivables, Related Security and Collections pursuant
to that certain Loan Agreement dated as of the date hereof (as the same may from
time to time hereafter be amended, supplemented, restated or otherwise modified,
the "LOAN AGREEMENT") among SPV, Interface, as Servicer, Three Pillars Funding
Corporation ("LENDER"), and SunTrust Capital Markets, Inc. or any successor
administrator appointed pursuant to the terms of the Loan Agreement, as agent
and administrator for Lender (in such capacity, the "ADMINISTRATOR").
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual agreements herein contained and other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASE
Section 1.1 Purchase of Receivables. Effective on the date hereof,
in consideration for the Purchase Price and upon the terms and subject to the
conditions set forth herein, each Original Seller does hereby sell, assign,
transfer, set-over and otherwise convey to Interface, without recourse (except
to the extent expressly provided herein), and Interface does hereby purchase
from each Original Seller, all of such Original Seller's right, title and
interest in and to all of such Original Seller's Receivables existing as of the
close of business on the Business Day immediately prior to the date hereof and
all Receivables thereafter arising through and including the Termination Date,
together, in each case, with all Related Security relating thereto and all
Collections thereof. In accordance with the preceding sentence, on the date
hereof Interface shall acquire all of such Original Seller's right, title and
interest in and to all of such Receivables existing as of the close of business
on the Business Day immediately prior to the date hereof and thereafter arising
through and including the Termination Date, together with all Related Security
relating thereto and all Collections thereof. Interface shall be obligated to
pay the Purchase Price for the Receivables purchased hereunder in accordance
with Section 1.2. In connection with consummation of the Purchase Price for any
Receivables purchased hereunder, Interface may request that each Original Seller
deliver, and each Original Seller shall deliver, such approvals, opinions,
information, reports or documents as Interface may reasonably request.
(a) It is the intention of the parties hereto that the Purchase of
Receivables made hereunder shall constitute a sale, which sale is absolute and
irrevocable and provides Interface with the full benefits of ownership of the
Receivables. Except for the Purchase Price Credits owed pursuant to Section 1.3,
the sale of Receivables hereunder is made without recourse to any Original
Seller; provided, however, that (i) each Original Seller shall be liable to
Interface for all representations, warranties, covenants and indemnities made by
such Original Seller pursuant to the terms of the Transaction Documents to which
such Original Seller is a party, and (ii) such sale does not constitute and is
not intended to result in an assumption by Interface or any assignee thereof of
any obligation of any Original Seller or any other Person arising in connection
with the Receivables, the related Contracts and/or other Related Security or any
other obligations of any Original Seller. In view of the intention of the
parties hereto that the Purchase of Receivables made hereunder shall constitute
a sale of such Receivables rather than loans secured thereby, each Original
Seller agrees that it will, on or prior to the date hereof and in accordance
with Section 4.1(e)(ii), mark its master data processing records relating to the
Receivables with a legend acceptable to Interface, SPV (as Interface's assignee)
and to the Administrator (as SPV's secured party), evidencing that Interface has
purchased such Receivables as provided in this Agreement and to note in its
financial statements that its Receivables have been sold to Interface. Upon the
request of Interface, SPV (as Interface's assignee) or the Administrator (as
SPV's secured party), each Original Seller will duly authorize the filing of
such financing or continuation statements, or amendments thereto or assignments
thereof, and such other instruments or notices, as may be necessary or
appropriate to perfect and
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maintain the perfection of Interface's ownership interest in the Receivables and
the Related Security and Collections with respect thereto, or as Interface, SPV
(as Interface's assignee) or the Administrator (as SPV's secured party) may
reasonably request.
Section 1.2 Payment for the Purchase.
(a) The Purchase Price for the Purchase of Receivables in
existence on the close of business on the date hereof (the "INITIAL CUTOFF
DATE") shall be payable in full by Interface to the Original Seller of such
Receivables on the date hereof, and shall be paid to such Original Seller by
delivery of immediately available funds. The Purchase Price for each Receivable
coming into existence after the Initial Cutoff Date shall be due and owing in
full by Interface to the Original Seller of such Receivable or its designee on
the date each such Receivable came into existence (except that Interface may,
with respect to any such Purchase Price, offset against such Purchase Price any
amounts owed by the applicable Original Seller to Interface hereunder and that
have become due but remain unpaid) and shall be paid to such Original Seller in
the manner provided in the following paragraphs (b), (c) and (d).
(b) With respect to any Receivables coming into existence after
the Initial Cutoff Date, on each Settlement Date, Interface shall pay the
Purchase Price therefor in accordance with Section 1.2(d) by delivery of
immediately available funds.
(c) From and after the Termination Date, no Original Seller shall
sell Receivables to Interface.
(d) Although the Purchase Price for each Receivable coming into
existence after the Initial Cutoff Date shall be due and payable in full by
Interface to the Original Seller of such Receivable on the date such Receivable
came into existence, settlement of the Purchase Price between Interface and each
Original Seller shall be effected on each Settlement Date with respect to all
Receivables coming into existence (i) if settlement is effected on a monthly
basis, during the same Calculation Period and based on information contained in
the Monthly Report delivered by the Servicer pursuant to the Loan Agreement for
the Calculation Period most recently ended, or (ii) if settlement is effected on
a weekly basis, during the calendar week reported in the Borrowing Base
Certificate most recently delivered by the Servicer pursuant to the Loan
Agreement and based on the information contained in such Borrowing Base
Certificate. Although settlement shall be effected in the foregoing manner,
increases or decreases in the amount owing under the Subordinated Note made
pursuant to Section 1.2(b) of the Receivables Sale Agreement and any
contribution of capital by Interface to SPV made pursuant to Section 1.2(b) the
Receivables Sale Agreement shall be deemed to have occurred and shall be
effective as of the last Business Day of the Calculation Period to which such
settlement relates.
Section 1.3 Purchase Price Credit Adjustments. If on any day:
(a) the Outstanding Balance of a Receivable is:
(i) reduced as a result of any defective or rejected or
returned goods or services, any discount or any adjustment or otherwise
by the Original Seller of such Receivable (other than cash Collections
on account of the Receivables),
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(ii) reduced or canceled as a result of a setoff in
respect of any claim by any Person (whether such claim arises out of
the same or a related transaction or an unrelated transaction), or
(b) any Contract with respect to any Receivable shall fail to
create a legal, valid and binding obligation of the related Obligor to pay the
Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon, or
(c) any of the representations and warranties set forth in Article
II are not true when made or deemed made with respect to any Receivable,
then, in such event, Interface shall be entitled to a credit (each, a "PURCHASE
PRICE CREDIT") against the Purchase Price otherwise payable hereunder to the
Original Seller of such Receivable equal to the Outstanding Balance of such
Receivable (calculated before giving effect to the applicable reduction or
cancellation). If such Purchase Price Credit exceeds the Original Balance of the
Receivables of such Original Seller coming into existence on any day, then such
Original Seller shall pay the remaining amount of such Purchase Price Credit in
cash immediately.
Section 1.4 Payments and Computations, Etc. All amounts to be paid
or deposited by Interface hereunder shall be paid or deposited in accordance
with the terms hereof on the day when due in immediately available funds to the
account of the applicable Original Seller designated from time to time by such
Original Seller or as otherwise directed by such Original Seller. In the event
that any payment owed by any Person hereunder becomes due on a day that is not a
Business Day, then such payment shall be made on the next succeeding Business
Day. If any Person fails to pay any amount hereunder when due, such Person
agrees to pay, on demand, the Default Fee in respect thereof until paid in full;
provided, however, that such Default Fee shall not at any time exceed the
maximum rate permitted by applicable law. All computations of interest payable
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first but excluding the last day) elapsed.
Section 1.5 Transfer of Records.
(a) In connection with the Purchase of Receivables hereunder, each
Original Seller hereby sells, transfers, assigns and otherwise conveys to
Interface all of such Original Seller's right and title to and interest in the
Records relating to all Receivables sold hereunder, without the need for any
further documentation in connection with the Purchase. In connection with such
transfer, each Original Seller hereby grants to each of Interface, SPV, the
Administrator and the Servicer an irrevocable, non-exclusive license to use,
without royalty or payment of any kind, all software used by such Original
Seller to account for its Receivables, to the extent necessary to administer
such Receivables, whether such software is owned by such Original Seller or is
owned by others and used by such Original Seller under license agreements with
respect thereto, provided that should the consent of any licensor of such
software be required for the grant of the license described herein, to be
effective, such Original Seller hereby agrees that upon the request of Interface
(or Interface's assignee), such Original Seller will use its reasonable efforts
to obtain the consent of such third-party licensor. The license granted hereby
shall be irrevocable until the indefeasible payment in full of the Aggregate
Unpaid Balance, and shall terminate on the date this Agreement terminates in
accordance with its terms.
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(b) Each Original Seller (i) shall take such action requested by
Interface, SPV (as Interface's assignee) and/or the Administrator (as SPV's
secured party), from time to time hereafter, that may be necessary or
appropriate to ensure that Interface, SPV and their respective assigns have an
enforceable ownership interest in the Records relating to the Receivables
purchased from such Original Seller hereunder, and (ii) shall use its reasonable
efforts to ensure that Interface, SPV, the Administrator and the Servicer each
has an enforceable right (whether by license or sublicense or otherwise) to use
all of the computer software used to account for the Receivables and/or to
recreate such Records.
Section 1.6 Characterization. If, notwithstanding the intention of
the parties expressed in Section 1.1(b), any sale by any Original Seller to
Interface of Receivables hereunder shall not be characterized as a sale or such
sale shall for any reason be ineffective or unenforceable, then this Agreement
shall be deemed to, and hereby does, constitute a security agreement under the
UCC and other applicable law. For this purpose and without being in derogation
of the parties' intention that the sale of Receivables hereunder shall
constitute a true sale thereof, each Original Seller hereby grants to Interface
a valid and enforceable security interest in all of such Original Seller's
right, title and interest in, to and under all Receivables now existing and
hereafter arising, all Collections and Related Security with respect thereto,
each LockBox and LockBox Account, all other rights and payments relating to the
Receivables and all proceeds of the foregoing to secure the prompt and complete
payment of a loan deemed to have been made in an amount equal to the aggregate
outstanding Purchase Price of such Original Seller's Receivables together with
all other obligations of such Original Seller hereunder, which security interest
shall be prior to all other Adverse Claims thereto. Interface and its assigns
shall have, in addition to the rights and remedies that they may have under this
Agreement, all other rights and remedies provided to a secured creditor under
the UCC and other applicable law, which rights and remedies shall be cumulative.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties of Original Sellers.
Each Original Seller hereby represents and warrants to Interface on the date
hereof, on the date of the Purchase and on each date that any of such Original
Seller's Receivables comes into existence that:
(a) Corporate Existence and Power. Such Original Seller is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation, and is duly qualified to do business and is in
good standing as a foreign corporation, and has and holds all corporate power
and all governmental licenses, authorizations, consents and approvals required
to carry on its business in each jurisdiction in which its business is
conducted, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect..
(b) Power and Authority; Due Authorization, Execution and
Delivery. The execution and delivery by such Original Seller of this Agreement
and each other Transaction Document to which it is a party, and the performance
of its obligations hereunder and thereunder and, such Original Seller's use of
the proceeds of the Purchase from such Original Seller made hereunder, are
within its corporate powers and authority, and have been duly authorized by all
necessary corporate action on its part. This Agreement and each other
Transaction Document to
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which such Original Seller is a party has been duly executed and delivered by
such Original Seller.
(c) No Conflict. The execution and delivery by such Original
Seller of this Agreement and each other Transaction Document to which it is a
party, and the performance of its obligations hereunder and thereunder do not
contravene or violate (i) its Organizational Documents, (ii) any law, rule or
regulation applicable to it, (iii) any restrictions under any agreement,
contract or instrument to which it is a party or by which it or any of its
property is bound, or (iv) any order, writ, judgment, award, injunction or
decree binding on or affecting it or its property, and do not result in the
creation or imposition of any Adverse Claim on assets of such Original Seller or
its Subsidiaries (except as created hereunder), except, in any case, where such
contravention or violation could not reasonably be expected to have a Material
Adverse Effect. No transaction contemplated hereby requires compliance with any
bulk sales act or similar law.
(d) Governmental Authorization. Other than the filing of the
financing statements required hereunder, no authorization or approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution and delivery by such Original
Seller of this Agreement and each other Transaction Document to which it is a
party and the performance of its obligations hereunder.
(e) Actions, Suits. There are no actions, suits or proceedings
pending, or to the best of such Original Seller's knowledge, threatened, against
or affecting such Original Seller, or any of its properties, in or before any
court, arbitrator or other body, that could reasonably be expected to have a
Material Adverse Effect. Such Original Seller is not in default with respect to
any order of any court, arbitrator or governmental body that could reasonably be
expected to have a Material Adverse Effect.
(f) Binding Effect. This Agreement and each other Transaction
Document to which such Original Seller is a party constitute the legal, valid
and binding obligations of such Original Seller enforceable against such
Original Seller in accordance with their respective terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency, reorganization
or other similar laws relating to or limiting creditors' rights generally and by
general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law).
(g) Accuracy of Information. All information heretofore furnished
by such Original Seller or any of its Affiliates to Interface (or its assigns)
for purposes of or in connection with this Agreement, any of the other
Transaction Documents or any transaction contemplated hereby or thereby is true
and accurate in every material respect on the date such information is stated or
certified and does not contain any material misstatement of fact or omit to
state a material fact or any fact necessary to make the statements contained
therein not misleading as of the date such information is stated or certified.
(h) Use of Proceeds. No proceeds of any Purchase Price payment to
such Original Seller hereunder will be used (i) for a purpose that violates, or
would be inconsistent with, any law, rule or regulation applicable to such
Original Seller or (ii) to acquire any security
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in any transaction that is subject to Section 13 or 14 of the Securities
Exchange Act of 1934, as amended.
(i) Good Title. Immediately prior to the Purchase hereunder, each
Original Seller is the legal and beneficial owner of the Receivables and the
Related Security with respect thereto, free and clear of any Adverse Claim
(other than Permitted Adverse Claims), except as created by the Transaction
Documents. There have been duly filed all financing statements or other similar
instruments or documents necessary under the UCC (or any comparable law) of all
appropriate jurisdictions to perfect such Original Seller's ownership interest
in each Receivable, its Collections and the Related Security.
(j) Perfection. This Agreement, together with the filing of the
financing statements contemplated hereby, is effective to, and shall, upon each
Purchase hereunder, transfer to Interface (and Interface shall acquire from such
Original Seller) (i) legal and equitable title to, with the right to sell and
encumber each Receivable existing or hereafter arising, together with the
Collections with respect thereto, and (ii) all of such Original Seller's right,
title and interest in the Related Security associated with each Receivable, in
each case, free and clear of any Adverse Claim (other than Permitted Adverse
Claims), except as created by the Transactions Documents. There have been duly
filed all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect Interface's ownership interest in the Receivables, the Related
Security and the Collections (except for the Excluded Deposit Accounts).
(k) Places of Business and Locations of Records. The principal
places of business and chief executive office of such Original Seller and the
offices where it keeps all of its Records are located at the address(es) listed
on Exhibit II or such other locations of which Interface has been notified in
accordance with Section 4.2(a) in jurisdictions where all action required by
Section 4.2(a) has been taken and completed. Such Original Seller's Federal
Employer Identification Number and Organizational Identification Number is
correctly set forth on Exhibit II.
(l) Collections. The conditions and requirements set forth in
Section 4.1(j) have at all times been satisfied and duly performed. The names
and addresses of all Collection Banks, together with the account numbers of the
LockBox Accounts of such Original Seller at each Collection Bank and the post
office box number of each Lock Box, are listed on Exhibit III. Such Original
Seller has not granted any Person, other than Interface (and its assigns)
dominion and control of any LockBox or LockBox Account, or the right to take
dominion and control of any such LockBox or LockBox Account at a future time or
upon the occurrence of a future event.
(m) Material Adverse Effect. Since December 31, 1999, no event has
occurred that would have a Material Adverse Effect.
(n) Names. Such Original Seller will not use any corporate names,
trade names or assumed names other than the name in which it has executed this
Agreement with respect to, or in connection with, the creation of any Receivable
occurring after the Initial Cutoff
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Date, provided, that such Original Seller may use any corporate name, trade name
or assumed name as permitted by Section 4.2(a) hereof.
(o) Ownership of Interface. Interface owns, directly or
indirectly, 100% of the issued and outstanding capital stock of each Original
Seller, free and clear of any Adverse Claim (other than a Permitted Adverse
Claim). Such capital stock is validly issued, fully paid and nonassessable, and
there are no options, warrants or other rights to acquire securities of Original
Seller.
(p) Not a Holding Company or an Investment Company. Such Original
Seller is not a "holding company" or a "subsidiary holding company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended, or any successor statute. Such Original Seller is not an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or any successor statute.
(q) Compliance with Law. Such Original Seller has complied in all
respects with all applicable laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject, except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect. Each Receivable, together with the Contract related thereto, does not
contravene any laws, rules or regulations applicable thereto (including, without
limitation, laws, rules and regulations relating to truth in lending, fair
credit billing, fair credit reporting, equal credit opportunity, fair debt
collection practices and privacy), and no part of such Contract is in violation
of any such law, rule or regulation, except where such contravention or
violation could not reasonably be expected to have a Material Adverse Effect.
(r) Compliance with Credit and Collection Policies. Such Original
Seller has complied in all material respects with such Original Seller's Credit
and Collection Policy with regard to each Receivable and the related Contract,
and has not made any change to such Credit and Collection Policy, except such
material change as to which Interface (or its assigns) has been notified in
accordance with Section 4.1(a)(vii).
(s) Payments to Original Sellers. With respect to each Receivable
transferred to Interface by such Original Seller hereunder, the Purchase Price
received by such Original Seller constitutes reasonably equivalent value in
consideration therefor and such transfer was not made for or on account of an
antecedent debt. No transfer by such Original Seller of any Receivable hereunder
is or may be voidable under any section of the Bankruptcy Reform Act of 1978 (11
U.S.C. ss. 101 et seq.), as amended.
(t) Enforceability of Contracts. Each Contract with respect to
each Receivable of such Original Seller is effective to create, and has created,
a legal, valid and binding obligation of the related Obligor to pay the
Outstanding Balance of the Receivable created thereunder and any accrued
interest thereon, enforceable against the Obligor in accordance with its terms,
except as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or limiting creditors' rights
generally and by general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law).
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(u) Eligible Receivables. Each Receivable of such Original Seller
included at any time in the Net Receivables Balance as an Eligible Receivable
was, (i) in the case of the Existing Receivables, as of the date hereof, and,
(ii) in the case of all other Receivables, on the later to occur of the date of
the Purchase and the date it came into existence, an Eligible Receivable on such
date.
(v) Accounting. The manner in which such Original Seller accounts
for the transactions contemplated by this Agreement does not jeopardize the
characterization of the transactions contemplated herein as being true sales.
ARTICLE III.
CONDITIONS OF PURCHASE
Section 3.1 Conditions Precedent to Purchase. The Purchase under
this Agreement is subject to the conditions precedent that (a) Interface shall
have received on or before the date of such purchase those documents listed on
Schedule A and (b) all of the conditions to the initial purchase under the
Receivables Sale Agreement and the initial advance under the Loan Agreement
shall have been satisfied or waived in accordance with the terms thereof.
Section 3.2 Conditions Precedent to Subsequent Payments. Interface's
obligation to pay for Receivables coming into existence after the Initial Cutoff
Date shall be subject to the further conditions precedent that (a) the
Commitment Termination Date shall not have occurred; (b) Interface (or its
assigns) shall have received such other approvals, opinions or documents as it
may reasonably request and (c) on the date such Receivable came into existence,
the following statements shall be true (and acceptance of the proceeds of any
payment by any Original Seller for such Receivable shall be deemed a
representation and warranty by such Original Seller that such statements are
then true):
(i) the representations and warranties of such Original
Seller set forth in Article II are true and correct on and as of the
date such Receivable came into existence as though made on and as of
such date; and
(ii) no event has occurred and is continuing that will
constitute a Termination Event or a Potential Termination Event.
Notwithstanding the foregoing conditions precedent, upon payment of the Purchase
Price for any Receivable (whether by payment of cash and/or by offset of amounts
owed to Interface), title to such Receivable and the Related Security and
Collections with respect thereto shall vest in Interface, whether or not the
conditions precedent to Interface's obligation to pay for such Receivable were
in fact satisfied. The failure of any Original Seller to satisfy any of the
foregoing conditions precedent, however, shall give rise to a right of Interface
to rescind the related purchase of Receivables from such Original Seller and to
direct such Original Seller to pay to Interface an amount equal to the Purchase
Price payment that shall have been made with respect to any Receivables related
thereto.
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ARTICLE IV.
COVENANTS
Section 4.1 Affirmative Covenants of Original Sellers. Until the
date on which this Agreement terminates in accordance with its terms, each
Original Seller hereby covenants as set forth below:
(a) Reporting. Such Original Seller will maintain, for itself and
each of its Subsidiaries, a system of accounting established and administered in
accordance with GAAP, and furnish to Interface (or its assigns):
(i) Change in Credit and Collection Policies. At least
thirty (30) days prior to the effectiveness of any material change in
or material amendment to such Original Seller's Credit and Collection
Policy, a copy of such Original Seller's Credit and Collection Policy
then in effect and a notice (A) indicating such change or amendment,
and (B) if such proposed change or amendment could adversely affect the
collectibility of the Receivables of such Original Seller or decrease
the credit quality of any newly created Receivables of such Original
Seller, requesting Interface's consent thereto.
(ii) Other Information. Promptly, from time to time, such
other information, documents, records or reports relating to the
Receivables or the condition or operations, financial or otherwise, of
such Original Seller as Interface (or its assigns) may from time to
time reason ably request in order to protect the interests of Interface
(and its assigns) under or as contemplated by this Agreement.
(b) Notices. Such Original Seller will notify Interface (or its
assigns) in writing of any of the following promptly upon learning of the
occurrence thereof, describing the same and, if applicable, the steps being
taken with respect thereto:
(i) Termination Events or Potential Termination Events.
The occurrence of each Termination Event and each Potential Termination
Event, by a statement of an Authorized Officer of such Original Seller.
(ii) Judgment and Proceedings. (A) The entry of any
judgment or decree against such Original Seller or any of its
Subsidiaries if the aggregate amount of all judgments and decrees then
outstanding against such Original Seller and its Subsidiaries could
reasonably be expected to have a Material Adverse Effect, and (B) the
institution of any litigation, arbitration proceeding or governmental
proceeding against such Original Seller, which, if adversely decided
against Interface, could reasonably be expected to have a Material
Adverse Effect.
(iii) Material Adverse Effect. The occurrence of any event
or condition that has had, or could reasonably be expected to have, a
Material Adverse Effect.
(iv) Defaults Under Other Agreements. The occurrence of a
default or an event of default under any other material financing
arrangement pursuant to which such Original Seller is a debtor or an
obligor.
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(v) Downgrade of Interface. Any downgrade in the rating
of any Indebtedness of Interface, Inc. by Standard and Poor's Ratings
Group or by Moody's Investors Service, Inc., setting forth the
Indebtedness affected and the nature of such change.
(c) Compliance with Laws and Preservation of Corporate Existence.
Such Original Seller will comply in all respects with all applicable laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to
which it may be subject, except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect. Such Original Seller
will preserve and maintain its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation, and qualify and remain
qualified in good standing as a foreign corporation in each jurisdiction where
its business is conducted, except where the failure to so preserve and maintain
or qualify could not reasonably be expected to have a Material Adverse Effect.
(d) Audits. Such Original Seller will furnish to Interface (or its
assigns) from time to time such information with respect to it and the
Receivables as Interface (or its assigns) (subject to the last sentence of this
Section 4.1(d)) may reasonably request. Such Original Seller will, from time to
time during regular business hours as requested by Interface (or its assigns),
upon reasonable notice and at the sole cost of such Original Seller, permit
Interface (or its assigns) or their respective agents or representatives, (i) to
examine and make copies of and abstracts from all Records in the possession or
under the control of such Original Seller relating to the Receivables and the
Related Security, including, without limitation, the related Contracts, and (ii)
to visit the offices and properties of such Original Seller for the purpose of
examining such materials described in clause (i) above, and to discuss matters
relating to such Original Seller's financial condition or the Receivables and
the Related Security or such Original Seller's performance under any of the
Transaction Documents or such Original Seller's performance under the Contracts
and, in each case, with any of the officers or employees of such Original Seller
having knowledge of such matters. All such examinations and visits shall be at
the sole cost of such Original Seller; provided, however, that (i) for so long
as no Termination Event or Potential Termination Event shall have occurred and
be continuing and (ii) the result of the immediately preceding examination
and/or visit of Original Seller shall have been reasonably satisfactory to
Interface (and its assigns) (A) such examinations and/or visits shall be limited
to four times per calendar year per Person and (B) such cost shall be borne by
such Original Seller not more than twice per calendar year per Original Seller
(although in no event shall the foregoing be construed to limit Interface (and
its assigns) or their respective agents or representatives to two such
examination and/or visit of such Original Seller during such calendar year
period).
(e) Keeping and Marking of Records and Books.
(i) Such Original Seller will maintain and implement
administrative and operating procedures (including, without limitation,
an ability to recreate records evidencing Receivables in the event of
the destruction of the originals thereof), and keep and maintain all
documents, books, records and other information reasonably necessary or
advisable for the collection of all Receivables (including, without
limitation, records adequate to permit the immediate identification of
each new Receivable and all
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Collections of and adjustments to each existing Receivable). Such
Original Seller will give Interface (or its assigns) notice of any
material change in the administrative and operating procedures referred
to in the previous sentence.
(ii) Such Original Seller will (A) on or prior to the date
hereof, mark its master data processing records and other books and
records relating to the Receivables of such Original Seller with a
legend, acceptable to Interface (or its assigns), describing
Interface's and SPV's ownership interests in the Receivables and
further describing the security interest of the Administrator (on
behalf of Lender and its assigns) under the Loan Agreement and (B) upon
the request of Interface (or its assigns) after the occurrence of a
Termination Event, (x) mark each Contract with a legend describing
Interface's and SPV's ownership interests in the Receivables of such
Original Seller and further describing the security interest of the
Administrator (on behalf of Lender) and (y) deliver to Interface (or
its assigns) all Contracts (including, without limitation, all multiple
originals of any such Contract) relating to the Receivables.
(f) Compliance with Contracts and Credit and Collection Policy.
Such Original Seller will timely and fully (i) perform and comply in all
material respects with all provisions, covenants and other promises required to
be observed by it under the Contracts related to the Receivables of such
Original Seller, and (ii) comply in all in all material respects with the Credit
and Collection Policy in regard to each Receivable of such Original Seller and
the related Contract.
(g) Ownership. Such Original Seller will take all necessary action
to establish and maintain, irrevocably in Interface, (i) legal and equitable
title to the Receivables of such Original Seller and the Collections and (ii)
all of such Original Seller's right, title and interest in the Related Security
associated with such Receivables, in each case, free and clear of any Adverse
Claims (other than Permitted Adverse Claims) (including, without limitation, the
filing of all financing statements or other similar instruments or documents
necessary under the UCC (or any comparable law) of all appropriate jurisdictions
to perfect Interface's interest in such Receivables, Related Security and
Collections and such other action to perfect, protect or more fully evidence the
interest of Interface as Interface (or its assigns) may reasonably request).
(h) [Intentionally Omitted].
(i) Collections. Such Original Seller will cause (1) all proceeds
from all LockBoxes to be directly deposited by a Collection Bank into a LockBox
Account and (2) each LockBox and LockBox Account (other than the Excluded
Deposit Accounts) to be subject at all times to a LockBox Account Agreement that
is in full force and effect. In the event any payments relating to Receivables
are remitted directly to such Original Seller or any Affiliate of such Original
Seller, such Original Seller will remit (or will cause all such payments to be
remitted) directly to a Collection Bank and deposited into a LockBox Account (A)
if no Termination Event and no Significant Event has then occurred and is
continuing within two (2) Business Days following receipt thereof, and at any
time a Termination Event or a Significant Event has occurred and is continuing,
immediately upon receipt thereof.. At all times prior to such remittance, such
Original Seller will itself hold or, if applicable, will cause such payments to
be held in trust for the exclusive benefit of Interface and its assigns. Such
Original Seller will
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transfer exclusive ownership, dominion and control of each LockBox and LockBox
Account to Interface and, will not grant the right to take dominion and control
of any LockBox or LockBox Account at a future time or upon the occurrence of a
future event to any Person, except to Interface (or its assigns) as contemplated
by this Agreement and the Loan Agreement.
(j) Taxes. Such Original Seller will file all tax returns and
reports required by law to be filed by it and promptly pay all taxes and
governmental charges at any time owing, except any such taxes which are not yet
delinquent or are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books. Such Original Seller will pay when due any taxes
payable in connection with the Receivables of such Original Seller for all
periods during which such Receivables were owned by such Original Seller,
exclusive of taxes on or measured by income or gross receipts of Interface and
its assigns.
(k) Insurance. Such Original Seller will maintain in effect, or
cause to be maintained in effect, at such Original Seller's own expense, such
casualty and liability insurance as such Original Seller deems appropriate in
its good faith business judgment. Interface, SPV and the Administrator, for the
benefit of Lender, shall be named as additional insureds with respect to all
such liability insurance maintained by such Original Seller. Such Original
Seller will pay or cause to be paid, the premiums therefor and deliver to
Interface, SPV and the Administrator evidence satisfactory to Interface and the
Administrator of such insurance coverage. Copies of each policy shall be
furnished to Interface, SPV, the Administrator and Lender in certificated form
upon Interface's, SPV's, the Administrator's or Lender's request. The foregoing
requirements shall not be construed to negate, reduce or modify, and are in
addition to, such Original Seller's obligations hereunder.
(l) Accuracy of Information. All information furnished by such
Original Seller or any of its Affiliates to Interface (or its assigns) will be
true and accurate in every material respect on the date such information is
stated or certified and will not contain any material misstatement of fact or
omit to state a material face or any fact necessary to make the statements
contained therein not misleading as of the date such information is stated or
certified.
Section 4.2 Negative Covenants of Original Sellers. Until the date
on which this Agreement terminates in accordance with its terms, each Original
Seller hereby covenants that:
(a) Name Change, Offices and Records. In the event that any
Original Seller shall change its name, such Original Seller shall notify
Interface (and its assigns) of such change immediately, and in any event within
10 days of the occurrence of any such change. In the event that any Original
Seller shall change its identity, corporate structure, its state of organization
or any office where any material portion of Records are kept, such Original
Seller shall notify Interface (and its assigns) of such change as soon as
reasonably practicable, and in any event within 30 days of the occurrence of any
such change.
(b) Change in Payment Instructions to Obligors. Such Original
Seller will not add or terminate any bank as a Collection Bank, or make any
change in the instructions to Obligors regarding payments to be made to any
LockBox or LockBox Account, unless Interface
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(or its assigns) shall have received, at least ten (10) days before the proposed
effective date therefor, (i) written notice of such addition, termination or
change and (ii) with respect to the addition of a Collection Bank or a LockBox
or LockBox Account, an executed LockBox Account Agreement, acceptable to
Interface (and to SPV and its assigns) with respect to the new LockBox or
LockBox Account; provided, however, that such Original Seller may make changes
in instructions to Obligors regarding payments if such new instructions require
such Obligor to make payments to another existing LockBox Account (other than an
Excluded Deposit Account).
(c) Modifications to Contracts and Credit and Collection Policy.
Such Original Seller will not make any material change or any material amendment
to the Credit and Collection Policy that could reasonably be expected to
adversely affect the collectibility of the Receivables of such Original Seller
or decrease the credit quality of any newly created Receivables of such Original
Seller without the prior written consent of Interface (and SPV and its assigns).
Except as otherwise permitted in its capacity as Servicer pursuant to the Loan
Agreement, such Original Seller will not extend, amend or otherwise modify the
terms of any Receivable of such Original Seller or any Contract related thereto
other than in accordance with its Credit and Collection Policy.
(d) Sales, Liens. Such Original Seller will not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or grant any option with
respect to, or create or suffer to exist any Adverse Claim upon (including,
without limitation, the filing of any financing statement) or with respect to,
any Receivable of such Original Seller or any Related Security or Collections
with respect thereto, or upon or with respect to any Contract under which any
such Receivable arises, or any LockBox or LockBox Account, or assign any right
to receive income with respect thereto (other than, in each case, the creation
of the interests therein in favor of Interface provided for herein), and such
Original Seller will defend the right, title and interest of Interface in, to
and under any of the foregoing property, against all claims of third parties
claiming through or under such Original Seller. Such Original Seller shall not
create or suffer to exist any mortgage, pledge, security interest, encumbrance,
lien, charge or other similar arrangement on any of its inventory, other than ad
Adverse Claim in favor of the Collateral Administrator (under and as defined in
Interface Revolving Credit Agreement).
(e) Accounting for Purchase. Such Original Seller will not, and
will not permit any Affiliate to, account for or treat (whether in financial
statements or otherwise) the transactions contemplated hereby in any manner
other than the sale of the Receivables of such Original Seller and the Related
Security by such Original Seller to Interface or in any other respect account
for or treat the transactions contemplated hereby in any manner other than as a
sale of such Receivables and the Related Security by such Original Seller to
Interface except to the extent that such transactions are not recognized on
account of consolidated financial reporting in accordance with generally
accepted accounting principles.
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ARTICLE V.
TERMINATION EVENTS
Section 5.1 Termination Events. The occurrence of any one or more
of the following events shall constitute a Termination Event:
(a) Any Original Seller shall fail (i) to make any payment or
deposit consisting of principal required hereunder when due and, in the case of
any failure to make a timely payment or deposit solely by reason of any
mechanical delay in or malfunction of the Fedwire system, such failure shall
continue for one (1) Business Day and so long as such Original Seller pays
immediately upon demand any and all losses, costs and expenses incurred by
Interface, the Buyer, Lender or the Administrator in connection with or as a
result of such failure to make a timely payment or deposit, (ii) to make any
payment or deposit (other than as referred to in clause (i) of this paragraph
(a)) of any other amounts when due hereunder and such failure shall continue for
three (3) consecutive Business Days, (iii) to comply with the provisions of
Section 4.1(b)(i), (ii) or (iii) or 4.2 and such failure shall continue for
thirty (3o) consecutive days after the earlier to occur of (x) such Original
Seller's having knowledge thereof and (y) such Original Seller's having received
written notice thereof from Interface, (iv) to comply with the provisions of
Section 4.1 (f), (g), (h), (j) or (m) and such failure shall continue for five
(5) consecutive Business Days after the earlier to occur of (x) such Original
Seller's having knowledge thereof and (y) such Original Seller's having received
written notice thereof from Interface, or (v) to perform or observe any term,
covenant or agreement hereunder (other than as referred to in clauses (i), (ii),
(iii) or (iv) of this paragraph (a)) and such failure shall continue for ten
(10) consecutive Business Days after the earlier to occur of (x) such Original
Seller's having knowledge thereof and (y) such Original Seller's having received
written notice thereof from Interface.
(b) Any representation, warranty, certification or statement made
by any Original Seller in this Agreement, any other Transaction Document to
which it is a party or in any other document delivered pursuant hereto or
thereto shall prove to have been incorrect in any material respect when made or
deemed made.
(c) Failure of any Original Seller to pay any Indebtedness when
due in an amount in excess of $10,000,000; or the default by any Original Seller
in the performance of any term, provision or condition contained in any
agreement under which any such Indebtedness was created or is governed, the
effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any such Indebtedness of any Original Seller shall be declared to
be due and payable or required to be prepaid (other than by a regularly
scheduled payment) prior to the date of maturity thereof.
(d) (i) Any Original Seller shall generally not pay its debts as
such debts become due or shall admit in writing its inability to pay its debts
generally or shall make a general assignment for the benefit of creditors; or
(ii) any proceeding shall be instituted by any Original Seller seeking to
adjudicate it bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it
15
or any substantial part of its property or (iii) any proceeding shall be
instituted against any Original Seller seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or any substantial part of its property
which proceeding is not dismissed within 30 days of the institution thereof or
(iv) any Original Seller shall take any corporate action to authorize any of the
actions set forth in this subsection (d).
(e) One or more final judgments for the payment of money in an
amount in excess of $10,000,000, individually or in the aggregate, shall be
entered against any Original Seller on claims not covered by insurance or as to
which the insurance carrier has denied its responsibility, and such judgment
shall continue unsatisfied and in effect for thirty (30) consecutive days
without a stay of execution.
(f) This Agreement shall terminate in whole or in part (except in
accordance with its terms), or shall cease to be effective or to be the legally
valid, binding and enforceable obligation of any Original Seller, or any Obligor
shall directly or indirectly contest in any manner such effectiveness, validity,
binding nature or enforceability, or Interface shall cease to have a valid
ownership interest in the Receivables, the Related Security and the Collections
with respect thereto, and the LockBox Accounts, free and clear of any Adverse
Claims (other than Permitted Adverse Claims).
(g) Interface shall fail to own, free and clear of any Adverse
Claims (other than a Permitted Adverse Claim), 100% of the voting stock of any
Original Seller.
Section 5.2 Remedies. Upon the occurrence and during the
continuation of a Termination Event, Interface may take any of the following
actions: (i) declare the Termination Date to have occurred, whereupon the
Termination Date shall forthwith occur, without demand, protest or further
notice of any kind, all of which are hereby expressly waived by each Original
Seller; provided, however, that upon the occurrence of a Termination Event
described in Section 5.1(d)(ii), (iii) or (iv), or of an actual or deemed entry
of an order for relief with respect to any Original Seller under the Federal
Bankruptcy Code, the Termination Date shall automatically occur, without demand,
protest or any notice of any kind, all of which are hereby expressly waived by
each Original Seller and (ii) to the fullest extent permitted by applicable law,
declare that the Default Fee shall accrue with respect to any amounts then due
and owing by each Original Seller to Interface. The aforementioned rights and
remedies shall be without limitation and shall be in addition to all other
rights and remedies of Interface and its assigns otherwise available under any
other provision of this Agreement, by operation of law, at equity or otherwise,
all of which are hereby expressly preserved, including, without limitation, all
rights and remedies provided under the UCC, all of which rights shall be
cumulative.
ARTICLE VI.
INDEMNIFICATION
Section 6.1 Indemnities by Original Sellers. Without limiting any
other rights that Interface may have hereunder or under applicable law, each
Original Seller hereby agrees to
16
indemnify (and pay upon demand to) Interface and its assigns, officers,
directors, agents and employees (each, an "INDEMNIFIED PARTY") from and against
any and all damages, losses, claims, taxes, liabilities, costs, expenses and for
all other amounts payable, including reasonable attorneys' fees (which attorneys
may be employees of Interface or any such assign) and disbursements (all of the
foregoing being collectively referred to as "INDEMNIFIED AMOUNTS") awarded
against or incurred by any of them arising out of or as a result of this
Agreement or the acquisition, either directly or indirectly, by Interface of an
interest in the Receivables of such Original Seller, excluding, however:
(a) Indemnified Amounts to the extent a final judgment of
a court of competent jurisdiction holds that such Indemnified Amounts
resulted from gross negligence or willful misconduct on the part of the
Indemnified Party seeking indemnification;
(b) Indemnified Amounts to the extent the same includes
losses in respect of Receivables that are uncollectible on account of
the insolvency, bankruptcy or lack of creditworthiness of the related
Obligor; or
(c) taxes imposed by the jurisdiction in which such
Indemnified Party's principal executive office is located and any
jurisdiction in which such Indemnified Party is doing business (except
to the extent that any such tax is imposed by such jurisdiction based
upon this Agreement or any other Transaction Document), on or measured
by the overall net income of such Indemnified Party to the extent that
the computation of such taxes is consistent with the characterization
for income tax purposes of the loans under the Loan Agreement as loans
by Lender to the SPV secured by, among other things, the Receivables,
the Related Security and the Collections;
provided, however, that nothing contained in this sentence shall limit the
liability of any Original Seller or limit the recourse of Interface to any
Original Seller for amounts otherwise specifically provided to be paid by such
Original Seller under the terms of this Agreement. Without limiting the
generality of the foregoing indemnification, each Original Seller shall
indemnify Interface for Indemnified Amounts (including, without limitation,
losses in respect of uncollectible receivables, regardless of whether
reimbursement therefor would constitute recourse to such Original Seller)
relating to or resulting from:
(i) any representation or warranty made by such Original
Seller (or any officers of such Original Seller) under or in connection
with this Agreement, any other Transaction Document or any other
information or report delivered by such Original Seller pursuant hereto
or thereto that shall have been false or incorrect when made or deemed
made;
(ii) the failure by such Original Seller, to comply with
any applicable law, rule or regulation with respect to any Receivable
of such Original Seller or Contract related thereto, or the non
conformity of any Receivable of such Original Seller or Contract
included therein with any such applicable law, rule or regulation or
any failure of such Original Seller to keep or perform any of its
obligations, express or implied, with respect to any Contract;
17
(iii) any failure of such Original Seller to perform its
duties, covenants or other obligations in accordance with the
provisions of this Agreement or any other Transaction Document;
(iv) any products liability, personal injury or damage,
suit or other similar claim arising out of or in connection with
merchandise, insurance or services that are the subject of any Contract
or any Receivable of such Original Seller;
(v) any dispute, claim, offset or defense (other than
discharge in bankruptcy of the Obligor) of the Obligor to the payment
of any Receivable of such Original Seller (including, without
limitation, a defense based on such Receivable or the related Contract
not being a legal, valid and binding obligation of such Obligor
enforceable against it in accordance with its terms), or any other
claim resulting from the sale of the merchandise or service related to
such Receivable or the furnishing or failure to furnish such
merchandise or services;
(vi) the commingling of Collections of Receivables of such
Original Seller at any time with other funds;
(vii) any investigation, litigation or proceeding related
to or arising from this Agreement or any other Transaction Document,
the transactions contemplated hereby, the use of the proceeds of any
Purchase Price Payment, the ownership of the Receivables of such
Original Seller or any other investigation, litigation or proceeding
relating to such Original Seller in which any Indemnified Party becomes
involved as a result of any of the transactions contemplated hereby;
(viii) any inability to litigate any claim against any
Obligor in respect of any Receivable of such Original Seller as a
result of such Obligor being immune from civil and commercial law and
suit on the grounds of sovereignty or otherwise from any legal action,
suit or proceeding;
(ix) any Termination Event described in Section 5.1(d);
(x) any failure to vest and maintain vested in Interface,
or to transfer to Interface, legal and equitable title to, and
ownership of, the Receivables of such Original Seller and the
Collections, and all of such Original Seller's right, title and
interest in the Related Security associated with the Receivables of
such Original Seller, in each case, free and clear of any Adverse Claim
(other than Permitted Adverse Claims);
(xi) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivable of such Original Seller, the Related Security
and Collections with respect thereto, and the proceeds of any thereof,
whether at the time of the Purchase or at any subsequent time;
(xii) any action or omission by such Original Seller that
reduces or impairs the rights of Interface with respect to any
Receivable of such Original Seller or the value of any such Receivable;
18
(xiii) any attempt by any Person to void the Purchase
hereunder under statutory provisions or common law or equitable action;
and
(xiv) the failure of any Receivable of such Original Seller
included in the calculation of the Net Receivables Balance as an
Eligible Receivable to be an Eligible Receivable at the time so
included.
Section 6.2 Other Costs and Expenses. The Original Sellers shall be
jointly and severally liable for, and shall pay to Interface on demand, all
costs and out-of- pocket expenses actually incurred in connection with the
preparation, execution, delivery and administration of this Agreement, the
transactions contemplated hereby and the other documents to be delivered
hereunder. Each Original Seller shall pay to Interface on demand any and all
costs and expenses of Interface actually incurred, if any, including reasonable
counsel fees and expenses in connection with the enforcement of this Agreement
and the other documents delivered hereunder against such Original Seller and in
connection with any restructuring or workout of this Agreement, the Receivables
Sale Agreement or the Loan Agreement, or such documents, or the administration
of this Agreement following a Termination Event.
ARTICLE VII.
MISCELLANEOUS
Section 7.1 Waivers and Amendments.
(a) No failure or delay on the part of Interface (or its assigns)
in exercising any power, right or remedy under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or remedy preclude any other further exercise thereof or the exercise of
any other power, right or remedy. The rights and remedies herein provided shall
be cumulative and nonexclusive of any rights or remedies provided by law. Any
waiver of this Agreement shall be effective only in the specific instance and
for the specific purpose for which given.
(b) No provision of this Agreement may be amended, supplemented,
modified or waived except in writing signed by each Original Seller and
Interface and, to the extent required under the Loan Agreement, the
Administrator.
Section 7.2 Notices. All communications and notices provided for
hereunder shall be in writing (including bank wire, telecopy or electronic
facsimile transmission or similar writing) and shall be given to the other
parties hereto at their respective addresses or telecopy numbers set forth on
the signature pages hereof or at such other address or telecopy number as such
Person may hereafter specify for the purpose of notice to each of the other
parties hereto. Each such notice or other communication shall be effective (a)
if personally delivered, when received, (b) if sent by certified mail, three
Business Days after having been deposited in the mail, postage prepaid, (c) if
sent by overnight courier, one Business Day after having been given to such
courier, and (d) if transmitted by facsimile, when sent, receipt confirmed by
telephone or electronic means.
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Section 7.3 Protection of Ownership Interests of Interface.
(a) Each Original Seller agrees that from time to time, at its
expense, it will promptly execute and deliver all instruments and documents, and
take all actions, that may be necessary or desirable, or that Interface (or its
assigns) may request, to perfect, protect or more fully evidence the interest of
Interface hereunder and the security interest of the Administrator under the
Loan Agreement, or to enable Interface (or its assigns) to exercise and enforce
their rights and remedies hereunder. At any time during the occurrence and
continuance of a Significant Event, Interface (or its assigns) may, at such
Original Seller's sole cost and expense, direct such Original Seller to notify
the Obligors of Receivables of such Original Seller of the ownership interests
of Interface under this Agreement and may also direct that payments of all
amounts due or that become due under any or all Receivables of such Original
Seller be made directly to Interface or its designee.
(b) If any Original Seller fails to perform any of its obligations
hereunder, Interface (or its assigns) may (but shall not be required to)
perform, or cause performance of, such obligations, and Interface's (or such
assigns') costs and expenses incurred in connection therewith shall be payable
by the Original Sellers as provided in Section 6.2. Each Original Seller
irrevocably authorizes Interface (and its assigns) at any time and from time to
time in the sole discretion of Interface (or its assigns), and appoints
Interface (and its assigns) as its attorney(ies)-in-fact, to act on behalf of
such Original Seller (i) to duly authorize on behalf of such Original Seller as
debtor and to file financing statements necessary or desirable in Interface's
(or its assigns') sole discretion to perfect and to maintain the perfection and
priority of the interest of Interface in the Receivables of such Original Seller
and (ii) to file a carbon, photographic or other reproduction of this Agreement
or any financing statement with respect to the Receivables of such Original
Seller as a financing statement in such offices as Interface (or its assigns) in
their sole discretion deem necessary or desirable to perfect and to maintain the
perfection and priority of Interface's interests in the Receivables of such
Original Seller. This appointment is coupled with an interest and is
irrevocable.
(c) Each Original Seller hereby agrees to act as sub-servicer of
the Servicer with respect to all Receivables conveyed by such Original Seller to
Interface hereunder and to perform the duties and obligations of the Servicer
pursuant to the terms of the Loan Agreement with respect to such Receivables.
Notwithstanding the foregoing (i) Interface shall be and remain primarily liable
to the Administrator and Lender for the full and prompt performance of all
duties and responsibilities of the Servicer under the Loan Agreement and (ii)
the Administrator and Lender shall be entitled to deal exclusively with
Interface in matters relating to the discharge by the Servicer of its duties and
responsibilities thereunder.
Section 7.4 Confidentiality.
(a) Each Original Seller shall maintain and shall cause each of
its employees and officers to maintain the confidentiality of this Agreement and
the other confidential or proprietary information with respect to the
Administrator and Lender and their respective businesses obtained by it or them
in connection with the structuring, negotiating and execution of the
transactions contemplated herein, except that such Original Seller and its
officers and employees may disclose such information to such Original Seller's
external accountants and
20
attorneys and as required by any applicable law or order of any judicial or
administrative proceeding.
(b) Anything herein to the contrary notwithstanding, each Original
Seller hereby consents to the disclosure of any nonpublic information with
respect to it (i) to Interface, SPV, the Administrator, or Lender by each other,
(ii) by Interface, SPV, the Administrator or Lender to any prospective or actual
assignee or participant of any of them who executes a confidentiality agreement
for the benefit of Interface and SPV on terms comparable to those required of
Interface hereunder with respect to such disclosed information and (iii) by the
Administrator to any rating agency, Commercial Paper dealer or provider of a
surety, guaranty or credit or liquidity enhancement to Lender or any entity
organized for the purpose of purchasing, or making loans secured by, financial
assets for which SunTrust Capital Markets, Inc. acts as the administrator and to
any officers, directors, employees, outside accountants and attorneys of any of
the foregoing who execute a confidentiality agreement for the benefit of
Interface and SPV on terms comparable to those required of Interface hereunder
with respect to such disclosed information; provided, that each such Person is
informed of the confidential nature of such information. In addition, Lender and
the Administrator may disclose any such nonpublic information pursuant to any
law, rule, regulation, direction, request or order of any judicial,
administrative or regulatory authority or proceedings (whether or not having the
force or effect of law).
(c) Interface shall maintain and shall cause each of its employees
and officers to maintain the confidentiality of this Agreement and the other
confidential or proprietary information with respect to each Original Seller,
the Obligors and their respective businesses obtained by it in connection with
the due diligence evaluations, structuring, negotiating and execution of the
Transaction Documents, and the consummation of the transactions contemplated
herein and any other activities of Interface arising from or related to the
transactions contemplated herein provided, however, that each of Interface and
its employees and officers shall be permitted to disclose such confidential or
proprietary information: (i) to the SPV, the Administrator and Lender, (ii) to
any prospective or actual assignee or participant of the Administrator or Lender
who executes a confidentiality agreement for the benefit of the Original Sellers
and Interface on terms comparable to those required of Interface hereunder with
respect to such disclosed information, (iii) to any rating agency, provider of a
surety, guaranty or credit or liquidity enhancement to Lender, (iv) to any
officers, directors, employees, outside accountants and attorneys of any of the
foregoing, and (v) to the extent required pursuant to any applicable law, rule,
regulation, direction, request or order of any judicial, administrative or
regulatory authority or proceedings with competent jurisdiction (whether or not
having the force or effect of law) so long as such required disclosure is made
under seal to the extent permitted by applicable law or by rule of court or
other applicable body.
Section 7.5 Bankruptcy Petition.
(a) Each Original Seller and Interface each hereby covenants and
agrees that, prior to the date that is one year and one day after the payment in
full of all outstanding senior indebtedness of Lender, it will not institute
against, or join any other Person in instituting against, Lender or any such
entity any bankruptcy, reorganization, arrangement, insolvency or
21
liquidation proceedings or other similar proceeding under the laws of the United
States or any state of the United States.
(b) Each Original Seller covenants and agrees that, prior to the
date that is one year and one day after the payment in full of all outstanding
obligations of the SPV under the Loan Agreement, it will not institute against,
or join any other Person in instituting against, the SPV any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceeding under the laws of the United States or any state of the
United States.
Section 7.6 Limitation of Liability. Except with respect to any
claim arising out of the willful misconduct or gross negligence of Lender or the
Administrator, no claim may be made by any Original Seller or any other Person
against Lender, the Administrator or their respective Affiliates, directors,
officers, employees, attorneys or agents for any special, indirect,
consequential or punitive damages in respect of any claim for breach of contract
or any other theory of liability arising out of or related to the transactions
contemplated by this Agreement, or any act, omission or event occurring in
connection therewith; and each Original Seller hereby waives, releases, and
agrees not to sue upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor.
Section 7.7 CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS
OTHER THAN SECTION 5-1401 OF THE NEW YORK OBLIGATIONS LAW) OF THE STATE OF NEW
YORK.
Section 7.8 CONSENT TO JURISDICTION. EACH ORIGINAL SELLER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR NEW YORK STATE COURT SIT TING IN NEW YORK, NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY DOCUMENT EXECUTED
BY SUCH ORIGINAL SELLER PURSUANT TO THIS AGREEMENT AND SUCH ORIGINAL SELLER
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETER MINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF INTERFACE (OR ITS
ASSIGNS) TO BRING PROCEEDINGS AGAINST ANY ORIGINAL SELLER IN THE COURTS OF ANY
OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY ORIGINAL SELLER AGAINST
INTERFACE (OR ITS ASSIGNS) OR ANY AFFILIATE THEREOF INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
THIS AGREEMENT OR ANY DOCUMENT EXECUTED BY SUCH ORIGINAL SELLER PURSUANT TO THIS
AGREEMENT SHALL BE BROUGHT ONLY IN A COURT IN NEW YORK, NEW YORK.
Section 7.9 WAIVER OF JURY TRIAL. TO THE EXTENT PERMIT TED BY
APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY
22
MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT, ANY DOCUMENT EXECUTED BY ANY
ORIGINAL SELLER PURSUANT TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED
HEREUNDER OR THEREUNDER.
Section 7.10 Integration; Binding Effect; Survival of Terms.
(a) This Agreement and each other Transaction Document contain the
final and complete integration of all prior expressions by the parties hereto
with respect to the subject matter hereof and shall constitute the entire
agreement among the parties hereto with respect to the subject matter hereof
superseding all prior oral or written understandings. This Agreement shall
supersede and replace the Original Receivables Transfer Agreement (other than
any provisions thereof which by their express terms survive termination of the
Original Receivables Transfer Agreement).
(b) This Agreement shall be binding upon and inure to the benefit
of each Original Seller and Interface, and their respective successors and
permitted assigns (including any trustee in bankruptcy). No Original Seller may
assign any of its rights and obligations hereunder or any interest herein
without the prior written consent of Interface. Interface may assign at any time
its rights and obligations hereunder and interests herein to any other Person
without the consent of any Original Seller. Without limiting the foregoing, each
Original Seller acknowledges that Interface, pursuant to the Receivables Sale
Agreement, may assign to the SPV, its rights, remedies, powers and privileges
hereunder, that the SPV, pursuant to the Loan Agreement, may grant to
Administrator a security interest in its rights, remedies, powers and privileges
thereunder, and that the Administrator may further assign such security interest
to the extent permitted in the Loan Agreement. Each Original Seller agrees that
SPV, as the assignee of Interface, and the Administrator, as secured party of
SPV, shall, subject to the terms of the Receivables Sale Agreement and the Loan
Agreement, have the right to enforce this Agreement and to exercise directly all
of Interface's rights and remedies under this Agreement (including, without
limitation, the right to give or withhold any consents or approvals of Interface
to be given or withheld hereunder) and each Original Seller agrees to cooperate
fully with SPV and the Administrator in the exercise of such rights and
remedies. This Agreement shall create and constitute the continuing obligations
of the parties hereto in accordance with its terms and shall remain in full
force and effect until terminated in accordance with its terms; provided,
however, that the rights and remedies with respect to (i) any breach of any
representation and warranty made by any Original Seller pursuant to Article II;
(ii) the indemnification and payment provisions of Article VI; and (iii) Section
7.5 shall be continuing and shall survive any termination of this Agreement.
Section 7.11 Counterparts; Severability; Section References. This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same Agreement. Delivery of an executed counterpart of a signature page to
this Agreement by facsimile shall be as effective as delivery of a manually
executed counterpart to this Agreement. Any provisions of this Agreement that
are prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the
23
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. Unless otherwise expressly indicated, all references herein
to "Article," "Section," "Schedule" or "Exhibit" shall mean articles and
sections of, and schedules and exhibits to, this Agreement.
[SIGNATURE PAGE FOLLOWS]
24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date hereof.
INTERFACE FABRICS GROUP MARKETING, INC.,
as an Original Seller
By: /s/ Patrick C. Lynch
-----------------------------------------------
Name: Patrick C. Lynch
Title: Vice President
Address:
c/o Interface, Inc.
2859 Paces Ferry Road, Suite 2000
Atlanta, GA 30339
Attention: Corporate Legal
Department
Phone: (770) 437-6800
Fax: (770) 319-6270
INTERFACE TEKNIT, INC., as an Original Seller
By: /s/ Patrick C. Lynch
-----------------------------------------------
Name: Patrick C. Lynch
Title: Vice President
Address:
c/o Interface, Inc.
2859 Paces Ferry Road, Suite 2000
Atlanta, GA 30339
Attention: Corporate Legal
Department
Phone: (770) 437-6800
Fax: (770) 319-6270
25
INTERFACE TEKSOLUTIONS, LLC, as an Original Seller
By: INTERFACE FABRICS GROUP
MARKETING, INC., its Sole Member
By: /s/ Patrick C. Lynch
-----------------------------------------------
Name: Patrick C. Lynch
Title: Vice President
Address:
c/o Interface, Inc.
2859 Paces Ferry Road, Suite 2000
Atlanta, GA 30339
Attention: Corporate Legal
Department
Phone: (770) 437-6800
Fax: (770) 319-6270
PANDEL, INC., as an Original Seller
By: /s/ Patrick C. Lynch
-----------------------------------------------
Name: Patrick C. Lynch
Title: Vice President
Address:
c/o Interface, Inc.
2859 Paces Ferry Road, Suite 2000
Atlanta, GA 30339
Attention: Corporate Legal
Department
Phone: (770) 437-6800
Fax: (770) 319-6270
26
INTERFACE AMERICAS, INC, as an Original Seller
By: /s/ Patrick C. Lynch
-----------------------------------------------
Name: Patrick C. Lynch
Title: Vice President
Address:
c/o Interface, Inc.
2859 Paces Ferry Road, Suite 2000
Atlanta, GA 30339
Attention: Corporate Legal
Department
Phone: (770) 437-6800
Fax: (770) 319-6270
INTERFACE, INC.
By: /s/ Patrick C. Lynch
-----------------------------------------------
Name: Patrick C. Lynch
Title: Vice President
Address:
2859 Paces Ferry Road, Suite 2000
Atlanta, GA 30339
Attention: Corporate Legal
Department
Phone: (770) 437-6800
Fax: (770) 319-6270
27
EXHIBIT I
Definitions
This is Exhibit I to the Agreement (as hereinafter defined). As used in
the Agreement and the Exhibits, Schedules and Annexes thereto, capitalized terms
have the meanings set forth in this Exhibit I (such meanings to be equally
applicable to the singular and plural forms thereof). If a capitalized term is
used in the Agreement, or any Exhibit, Schedule or Annex thereto, and not
otherwise defined therein or in this Exhibit I, such term shall have the meaning
assigned thereto in the Loan Agreement or in the Receivables Sale Agreement.
"ADMINISTRATOR" has the meaning set forth in the Preliminary Statements
to the Agreement.
"AGREEMENT" means the Receivables Transfer Agreement, dated as of
February 12, 2003, among the Original Sellers and Interface, as the same may be
amended, restated or otherwise modified.
"CALCULATION PERIOD" means each calendar month or portion thereof that
elapses during the term of the Agreement. The first Calculation Period shall
commence on the date of the Purchase of Receivables hereunder and the final
Calculation Period shall terminate on the Termination Date.
"CHANGE OF CONTROL" means a Change of Control under and as defined in
the Interface Revolving Credit Agreement.
"CREDIT AND COLLECTION POLICY" means each Original Seller's credit and
collection policies and practices relating to Contracts and Receivables existing
on the date hereof and summarized in Exhibit V, as modified from time to time in
accordance with the Agreement.
"DEFAULT FEE" means a per annum rate of interest equal to the sum of
(i) the Prime Rate, plus (ii) 2% per annum.
"DILUTIONS" means, at any time, the aggregate amount of reductions or
cancellations described in Section 1.3(a) of the Agreement.
"DISCOUNT FACTOR" means a percentage calculated to provide Interface
with a reasonable return on its investment in the Receivables of any Original
Seller after taking account of (i) the time value of money based upon the
anticipated dates of collection of the Receivables of such Original Seller and
the cost to Interface of financing its investment in the Receivables of such
Original Seller during such period and (ii) the risk of nonpayment by the
Obligors. Each Original Seller and Interface may agree from time to time to
change the Discount Factor with respect to Receivables purchased by Interface
from such Original Seller hereunder based on changes in one or more of the items
affecting the calculation thereof, provided that any change to the Discount
Factor shall take effect as of the commencement of a Calculation Period, shall
apply only prospectively and shall not affect the Purchase Price payment made
prior to the Calculation Period during which such Original Seller and Interface
agree to make such change.
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"INITIAL CUTOFF DATE" has the meaning set forth in Section 1.2(a).
"INTERFACE" has the meaning set forth in the preamble to the Agreement.
"LENDER" has the meaning set forth in the Preliminary Statements to the
Agreement.
"LOAN AGREEMENT" has the meaning set forth in the Preliminary
Statements to the Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
financial condition or operations of any Original Seller and its Subsidiaries,
(ii) the ability of any Original Seller to perform its obligations under the
Agreement or any other Transaction Document, (iii) the legality, validity or
enforceability of the Agreement or any other Transaction Document, (iv) any
Original Seller's, Interface's, SPV's or the Administrator's (on behalf of
Lender) interest in the Receivables generally or in any significant portion of
the Receivables, the Related Security or Collections with respect thereto, or
(v) the collectibility of the Receivables generally or of any material portion
of the Receivables.
"ORIGINAL BALANCE" means, with respect to any Receivable coming into
existence after the Initial Cutoff Date, the Outstanding Balance of such
Receivable on the date it was created.
"ORIGINAL RECEIVABLES PURCHASE AGREEMENT" means that certain
Receivables Purchase Agreement dated as of December 19, 2000 among SPV,
Interface, as servicer, certain financial institutions party thereto as
purchasers, Jupiter Securitization Corporation and Bank One, NA (Main Office
Chicago), as agent, as amended.
"ORIGINAL RECEIVABLES TRANSFER AGREEMENT" means the Receivables
Transfer Agreement as defined in the Original Receivables Purchase Agreement.
"ORIGINAL SELLER" has the meaning set forth in the preamble to the
Agreement.
"PERMITTED ADVERSE CLAIM" means (a) Liens for taxes or assessments or
other governmental charges not yet due and payable; and (b) Liens created by the
Transaction Documents.
"POTENTIAL TERMINATION EVENT" means an event that, with the passage of
time or the giving of notice, or both, would constitute a Termination Event.
"PURCHASE" means the purchase pursuant to Section 1.1(a) of the
Agreement by Interface from an Original Seller of such Original Seller's
Receivables and the Related Security and Collections related thereto, together
with all related rights in connection therewith.
"PURCHASE PRICE" means, with respect to the Purchase, the aggregate
price to be paid by Interface to the applicable Original Seller for such
Purchase in accordance with Section 1.2 of the Agreement for the Receivables,
Collections and Related Security of such Original Seller being sold to
Interface, which price shall equal on any date (i) the product of (x) the
29
Outstanding Balance of such Receivables on such date, multiplied by (y) one
minus the Discount Factor for such Original Seller in effect on such date, minus
(ii) any Purchase Price Credits to be credited against the Purchase Price
otherwise payable to such Original Seller in accordance with Section 1.3 of the
Agreement.
"PURCHASE PRICE CREDIT" has the meaning set forth in Section 1.3 of the
Agreement.
"RECEIVABLE" means all indebtedness and other obligations owed to an
Original Seller (at the times it arises, and before giving effect to any
transfer or conveyance under the Agreement) or Interface (after giving effect to
the transfers under the Agreement) or in which an Original Seller or Interface
has a security interest or other interest, including, without limitation, any
indebtedness, obligation or interest constituting an account, chattel paper,
instrument or general intangible, arising in connection with the sale of goods
or the rendering of services by such Original Seller, and further includes,
without limitation, the obligation to pay any Finance Charges with respect
thereto. Indebtedness and other rights and obligations arising from any one
transaction, including, without limitation, indebtedness and other rights and
obligations represented by an individual invoice, shall constitute a Receivable
separate from a Receivable consisting of the indebtedness and other rights and
obligations arising from any other transaction; provided, further, that any
indebtedness, rights or obligations referred to in the immediately preceding
sentence shall be a Receivable regardless of whether the account debtor or such
Original Seller treats such indebtedness, rights or obligations as a separate
payment obligation.
"RELATED SECURITY" means, with respect to any Receivable:
(i) all of the interest of the Original Seller of such Receivable
in the inventory and goods (including returned or repossessed inventory or
goods), if any, the sale or financing of which by such Original Seller gave rise
to such Receivable, and all insurance con tracts with respect thereto,
(ii) all other security interests or liens and property subject
thereto from time to time, if any, purporting to secure payment of such
Receivable, whether pursuant to the Contract related to such Receivable or
otherwise, together with all financing statements and security agreements
describing any collateral securing such Receivable,
(iii) all guaranties, letters of credit, insurance and other
agreements or arrangements of whatever character from time to time supporting or
securing payment of such Receivable whether pursuant to the Contract related to
such Receivable or otherwise,
(iv) all service contracts and other contracts and agreements
associated with such Receivable,
(v) all Records related to such Receivable,
(vi) all of such Original Seller's right, title and interest in
each LockBox and each LockBox Account, and
30
(viii) all proceeds of any of the foregoing.
"SETTLEMENT DATE" means, with respect to each Calculation Period, the
date that is the tenth (10th) calendar day of the month following such
Calculation Period.
"TERMINATION DATE" means the earliest to occur of (i) the Commitment
Termination Date (under and as defined in the Loan Agreement), (ii) the Business
Day immediately prior to the occurrence of a Termination Event set forth in
Section 5.1(d)(ii), (iii) or (iv), (iii) the Business Day specified in a written
notice from Interface to the Original Sellers following the occurrence of any
other Termination Event, and (iv) the date that is 30 days after Interface's
receipt of written notice from any Original Seller that it wishes to terminate
the facility evidenced by this Agreement.
"TERMINATION EVENT" has the meaning set forth in Section 5.1 of the
Agreement.
"TRANSACTION DOCUMENTS" means, collectively, this Agreement, each
LockBox Account Agreement and all other instruments, documents and
agreements executed and delivered in connection herewith.
All accounting terms not specifically defined herein shall be construed
in accordance with GAAP. All terms used in Article 9 of the UCC in the State of
New York, and not specifically defined herein, are used herein as defined in
such Article 9.
31